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LCD Soundsystem’s Ticket Fiasco – Is LiveNation to Blame?

The band is furious that nearly all of the tickets for its farewell show ended up on scalper sites and cast suspicion on the biggest player in the live music industry

LCD Soundsystem is rocking the concert world by suggesting that Live Nation has allowed ticket-scalping through another division of its company, TicketsNow. 

How's that?

When tickets for the dance-rock band's Madison Square Garden farewell concert went on sale last week, they quickly disappeared from Ticketmaster's site and reappeared on TicketsNow, the resale site, among others. Both are owned by Live Nation.

LCD frontman James Murphy cried foul. 

"i just want to give people who want to see us a chance to see us. for a reasonable ticket price. and i want to drop the price of the MSG tickets being sold by piece of shit scalpers," Murphy (pictured below) wrote in a blogpost to fans last week.

In an email response to TheWrap, Live Nation chairman Irving Azoff labeled claims that the company was involved with scalping “ridiculous.”

Meanwhile, an individual close to the ticketing process said that only two percent of the 13,000 LCD tickets were made available to TicketMaster, and the rest were allotted to the band, the record label and Madison Square Garden.

Regardless of who is at fault, the accusation has raised anger among fans and prompted elaborate theories as to why the tickets sold as if they were Justin Bieber's last stand.

Wrote Murphy: "i read that people had already bought flights, hotels. wanted to bring their kids. waited in the cold. i read that some people thought this was one of the reasons we were calling it quits (check). i read that this was a media stunt we planned."

The controversy also highlights an ongoing problem in the concert world — the rise of rampant online scalping, and the murky question of how that occurs. What goes with that is the danger of alienating music fans.

In his blog, Murphy was skeptical that LCD on its own could sell out the limited run of 13,000 tickets to the Garden show. Yet, he said, "within minutes on Friday all the tickets on offer were snapped up online. The same $50 tickets shortly thereafter appeared for thousands of dollars apiece on reseller websites."

Murphy charges that most of the seats went to online resellers, including eBay’s StubHub and TicketsNow.

According to Ticketmaster’s website on Monday, all seats in the Garden were indeed unavailable. TicketsNow.com meanwhile showed ticket prices marked up for the concert to $181 for upper-level seats all the way to a whopping $2,588 for floor seats.

A spokesperson for the band did not respond to questions about how many tickets LCD Soundsystem controlled.

But in reaction, the group scheduled four more shows, and wrote on its website on Tuesday that it will only allow ticket-holders in who “show i.d. at will call and then immediately enter the venue.”

Murphy added: “We’re told that Ticketmaster will also sweep the online purchases daily and delete any duplications from potential scalper bots."

But at least one respected music analyst threw the current controversy back on LCD Soundsystem.

In his blog, “The Lefsetz Letter,” Bob Lefsetz theorized that the concert's promoter Bowery Presents had withheld tickets to drive up prices on the secondary market and drum up publicity.

“James Murphy could publish exactly how many tickets go on sale to the general public, but he doesn’t want to,” Lefsetz wrote. “No act wants to, they’re afraid of the public outcry.  This information is available to acts, but they don’t want to disseminate it. Because if the public doesn’t believe it can get seats at a fair price, it’s out.  People turned on Toyota, they could turn on the concert industry, too.”

The LCD Soundsystem controversy comes at a precarious time for the music industry and threatens the one bright spot in an otherwise bleak picture. Album sales have been in decline for the past 10 years, with the no end in sight. In the fourth quarter of 2010, album sales plunged 13 percent,with even the market for digital downloads showing signs of flatlining, according to Nielsen SoundScan.

The only sector of the business that had held up had been concerts, at least until last year. In 2010, North American concert grosses dipped 26 percent and attendance fell 12 percent.

To that end, the music business cannot afford the bad publicity it’s getting from the LCD Soundsystem debacle.

Live Nation and other brokers are not supposed to buy up large blocs of seats for concerts – in fact, ticket sales are often limited to four per person. But it is not unusual for brokers to hire, at low cost, a large staff to call or go online as soon as tickets go on sale and gobble as many up as possible.

The Department of Justice approved the merger of Ticketmaster and Live Nation knowing full-well Live Nation operated TicketsNow – although, the regulatory body did prevent TicketsNow and Ticketmaster from linking to each other from their respective homepages.

Indeed, pre-merger, the relationship between Ticketmaster and TicketsNow resulted in a major public relations fiasco.

After Bruce Springsteen fans logged onto Ticketmaster to buy tickets to some 14 concerts they were redirected to the resale site. Facing allegations that it forced customers to buy scalped tickets, the company was forced to refund money.

As part of a settlement with the Federal Communications Commission and the state of New Jersey, it was also ordered to overhaul the way it reveals information about ticket availability. 

Giving some credence to the insider's claim that Ticketmaster only managed a small portion of the tickets to LCD Soundsystem's farewell, in the wake of the controversy over the Springsteen sell-outs, the Newark Star-Ledger discovered that the band had held back 12 percent of available tickets to its shows.

And that wasn’t even the first time Ticketmaster has come under fire.  In 1994, more than a decade before Live Nation purchased Ticketmaster, the ticket seller was boycotted by Pearl Jam, with the Seattle-based group accusing the company — in a memorandum filed to the Antitrust Division of the U.S. Department of Justice — of having "virtually (an) absolute monopoly on the distribution of tickets to concerts."

Pearl Jam boycotted the company for a year, finally capitulating when the band realized it was too difficult to sell tickets on their own.

With regard to charges that Ticketmaster holds back seats for or diverts fans to TicketsNow, the company runs this disclaimer on its site:

"Ticketmaster supports its venue, promoter, artist, and sports clients and commits to connecting fans with live entertainment. Ticketmaster cannot — and does not – divert tickets between Ticketmaster and TicketsNow or provide preferential access to primary market tickets to TicketsNow. Nor does Ticketmaster give special privileges to brokers, which could put us at odds with our clients, and strictly enforces ticket limits.”

As for those concerts LCD Soundsystem added at New York City's Terminal 5? Those sold out an hour after tickets went on sale on Tuesday morning.

Maybe it was simply a problem of supply and demand all along.